Hedge Fund Manager Cohen Selling Parts of Collection

The NY Times Dealbook is reporting that hedge fund manager Steven Cohen will be offering portions of his art collection in order to raise funds. The article states he has been selling stocks, but now has sought cash from his art collection.

According to the report, Sotheby's will be offering two Warhol's an Elizabeth Taylor expected to raise $20-$30 million (see image) and 5 Deaths on Turquoise expect to raise $7-$10 million. In addition to the Warhol's he will also sell an abstract by Gerhard Richter.

Cohen has recently agreed to settle two suits for over $600 million and the SEC has offered him a deal with a penalty of $2 billion.  He continues to negotiate with the SEC.

The NY Times reports

In recent months, as his legal troubles have deepened, the billionaire hedge-fund manager Steven A. Cohen has sold stocks to meet withdrawal requests from skittish investors.

Now, in addition to stocks, Mr. Cohen is selling significant works of art from his celebrated collection.

Mr. Cohen has put two major paintings by Andy Warhol and an abstract canvas by Gerhard Richter up for sale, according to art experts familiar with his holdings who requested anonymity because they were not authorized to speak publicly. Sotheby’s will auction the works at next month’s contemporary art auction in New York.

The two Warhols, both painted in 1963, are “Liz #1 (early Colored Liz),” an image of Elizabeth Taylor on a bright yellow background estimated to sell for $20 million to $30 million, and “5 Deaths on Turquoise (Turquoise Disaster),” thought to bring in $7 million to $10 million. Sotheby’s featured the Warhols last week at the Katara Art Center in Doha, Qatar, where it was showing upcoming highlights from next month’s event.

People familiar with Mr. Cohen’s collection said that these paintings were part of a larger group of his works being put up for auction.

Mr. Cohen has hundreds of works in his prodigious collection and, in keeping with his trader’s mentality, buys and sells them with frequency. Owners of fine art also often sell art for tax reasons, as they can defer their tax liability by exchanging one piece for another.

Still, the dispositions come as Mr. Cohen faces mounting legal bills and record penalties that he might be forced to pay as part of a settlement related to criminal insider trading charges brought against his fund, SAC Capital Advisors. The government has offered the fund a deal to resolve the case by pleading guilty and paying a penalty of nearly $2 billion. Mr. Cohen’s lawyers are in the midst of negotiating a possible plea deal with prosecutors, though the two sides have yet to reach an agreement.

Because Mr. Cohen owns 100 percent of his firm, any fine paid by SAC would effectively come out of Mr. Cohen’s pocket. SAC has already agreed to pay $616 million to settle two civil insider-trading actions brought by the Securities and Exchange Commission.

Source: The NY Times